Business Directories

Petrochina buys 25pc stake in Iraq oilfield

Baghdad, November 28, 2013

PetroChina has bought a 25 percent stake in the West Qurna-1 oilfield project from Exxon Mobil, strengthening China's hold on Iraq's energy resources.

China is already the top foreign player in Iraq's oilfields, which are the largest in the Middle East open to foreign investment.

Iraq said in August that Exxon Mobil was selling more than half of its 60 percent holding in the field - with Indonesia's Pertamina taking 10 percent.

The 25 percent stake in the Technical Service Contract (TSC) for the vast oilfield gives "a larger and stronger presence in the upstream operations in the Middle East," Petrochina, part of state-owned China National Petroleum Corp (CNPC), said in a statement.

Exxon remains operator of the project, despite reducing its stake to 25 percent, while Pertamina has 10 percent, Royal Dutch Shell 15 percent and the Iraqi state keeps 25 percent, oil ministry spokesman Asim Jihad said on Thursday.

Last year Exxon offered to sell its entire stake after a dispute with Baghdad over contracts it signed with Iraq's autonomous Kurdistan region - deals the central government rejects as illegal.

It later committed to further investment at the field - now pumping almost 500,000 barrels a day - and stepped back from making a full exit.

Cash-rich China's advance in Iraq has already given it a strong position in prized southern oilfields, and through Chinese oil company Sinopec, its reach has extended into the northern Kurdish region.

Long-term access to reserves is a strategic imperative for China, a major buyer of Iraqi crude, and Beijing is prepared to accept tougher terms and lower profits than Western oil majors, which have to answer to shareholders.

Iraq has the world's fourth-largest oil reserves and wants to at least double its production in the next few years and ultimately challenge Russia and Saudi Arabia as the world's biggest oil supplier. – Reuters